M/S Pankaj Kumar Mishra vs. The State Of Bihar

Held

The Court quashed and set aside the impugned appellate order dated March 14, 2021, the ex-parte order dated March 3, 2020, the summary of order dated March 5, 2020, and the rectification rejection order dated October 4, 2021. The Court found the orders to be bad in law due to violations of the principles of natural justice, specifically the lack of a fair opportunity of hearing and the ex-parte nature of the orders without sufficient reasoning to determine the due amount. The Court noted that such orders entail civil consequences. The Court also found that the authorities had not adjudicated the matter on the attending facts and circumstances. The matter was remanded to the Assessing Authority for a fresh decision on merits after complying with the principles of natural justice. The petitioner was directed to deposit an additional ten percent of the demand raised before the Assessing Officer within four weeks. The Court also directed de-freezing of the petitioner's bank accounts. No opinion was expressed on the merits of the case, and all issues were left open. The Assessing Authority was directed to decide the case expeditiously, preferably within two months, and pass a speaking order.

Facts

The petitioner, M/s Pankaj Kumar Mishra, a firm, challenged an appellate order dated March 14, 2021, passed by the Additional Commissioner of State Taxes (Appeals), Bhagalpur. This order rejected the petitioner's appeal against an ex-parte order dated March 3, 2020, and a summary of order dated March 5, 2020, passed by the Assistant Commissioner of State Taxes, Munger Circle. The original orders imposed tax, interest, and penalty under Section 74 of the Bihar Goods and Services Tax Act, 2017. The petitioner's subsequent request for rectification of the appellate order was also rejected on October 4, 2021. The petitioner contended that the tax liability for January 2019 was admitted and discharged, rendering the proceedings under Section 74 invalid.

Key Issues

1. Whether the appellate order dated March 14, 2021, rejecting the petitioner's appeal on grounds of delay and limitation, is sustainable in law, particularly in light of the petitioner's claim that the tax liability was already discharged? 2. Whether the rejection of the petitioner's request for rectification of the appellate order dated October 4, 2021, was erroneous? 3. Whether the ex-parte order dated March 3, 2020, and the summary of order dated March 5, 2020, imposing tax, interest, and penalty under Section 74 of the Bihar Goods and Services Tax Act, 2017, are vitiated by a violation of the principles of natural justice and lack sufficient reasoning? Petitioner's contentions: The petitioner argued that the tax liability for January 2019 was admitted and discharged through returns filed for March 2019, making the proceedings under Section 74 non-est. They also contended that the original order was passed ex-parte without sufficient opportunity for hearing and lacked proper reasoning. The appellate order rejecting the appeal on limitation grounds and the subsequent rectification rejection were also challenged. Revenue's contentions: The Revenue, through its counsel, had no objection to the matter being remanded to the Assessing Authority for a fresh decision on merits, with limitation not being a bar, and no coercive steps being taken during the pendency of the case.